Press Releases, 12/10/2013 | Ministry for Foreign Affairs of Finland

WTO agreement good news for world economy

Press release 256/2013
7.12.2013

Early in the morning of 7 December, the member states of the World Trade Organisation (WTO) reached an agreement on the “Bali mini-package” in the Ministerial Conference held in Bali, Indonesia. The package consists of three parts: trade facilitation, agricultural issues, and development issues. This is the first multilateral trade agreement negotiated within the WTO since its establishment in 1995.

“The agreement is an important step for the multilateral trading system. Without this resolution WTO’s credibility would have been at stake," comments Minister for European Affairs and Foreign Trade Alexander Stubb, who represented Finland at the conference.

Stubb estimated that, from Finland’s perspective, the most important decision was the one on trade facilitation. The agreement will simplify customs procedures in foreign global commerce and reduce export and import costs. Simplified customs proceedings will significantly speed up customs procedures and cut red tape.

The agreement includes transition periods of varying lengths. According to OECD study, the implementation of the agreement will reduce costs of trade in OECD countries by approximately 10 per cent and in other countries by some 13–15.5 per cent. The parties benefiting the most will be the SMEs in developing countries, which suffer the most from administrative costs and complex practices as their products cross national borders.

The conference also reached an agreement on a few agricultural issues. The agreement will give developing countries an opportunity to pay more support for public stockholding of agricultural products for food security than is currently possible. No amendments were made in the rules on export subsidies included in the WTO’s Agreement on Agriculture, but the member states strive to keep their export subsidies at an as low level as possible.

The agreement reached in Bali is part of the extensive Doha Round of Trade Negotiations, which have been going on since 2001.

“It is great that mutual agreement could be found on this mini-package in Bali. The agreement covers 160 WTO member states, including all the largest economies. After this, efforts for liberalisation of world trade must be continued on a broad front. Bilateral, regional and multilateral free-trade agreements complement the WTO’s multilateral trading system,” Minister Stubb points out.